Tuesday, November 12, 2013

Corn Numbers on Food vs. Fuel

Chad Lee, Extension Agronomist, University of Kentucky

There is a lot of recent discussion about corn for food versus corn for fuel. Here are some numbers on corn in the United States that seem to be lost in this discussion

Based on 2011 estimates, corn for direct food consumption was about 5 to10% of total U.S. production. Fuel ethanol was 38%, feed and residual was 38%, and exports were 14%. (Source: USDA-ERS Yearbook).

The food category is a bit challenging to calculate accurately. Within the food category is the cereal and other products category (corn flakes and tortilla chips) which is 1% of total production. The corn sugar (high fructose corn syrup) is 4% of total corn production. Adding these two makes 5% of total corn produced in direct food consumption. Other categories that can be added to the direct food consumption are starch (2%), glucose and dextrose (2%) and alcohol (bourbon, whiskey, vodka) (1% of total corn production). If all of these groups are added together, then the food category is 10%. But, some of the starch, glucose and dextrose are used for industrial purposes (such as absorbent material in baby diapers) so not all of those should be counted in the food category. Alcohol is direct consumption, but not a food. While the "direct food consumption" number is hard to calculate exactly, we can say that corn for direct food consumption is 10% or less of total corn production.

Corn hybrids grown for cereals and other products normally are "food-type" hybrids. Acres for these hybrids are counted in the overall corn production numbers, but are dedicated to cereals and other products.

The two largest categories for corn use are feed and residual for animals (38%) and fuel ethanol (38%). Exports is a smaller portion of total corn production (14%) but larger than the direct consumption category. While 38% of the crop initially goes to ethanol, about 1/3 of that returns to livestock feed as distillers grains. If that 1/3 is added to livestock, then the corn that feeds livestock is closer to 50% and the effective corn used in ethanol is about 25%.

Corn was harvested on 84 million U.S. acres in the 2011 marketing year and is expected to be harvested on about 87 million acres this year. These numbers are up over the last 10 years, but still down from our overall highs around 1909 to 1918 when corn for grain was harvested on over 100 million U.S. acres. Corn is also grown as a forage crop and some acres are destroyed by bad weather events. Those acres are not included in the harvested grain acres above.

Corn farmers in Kentucky often grow soybeans and wheat in their rotations. Soybeans were harvested on 73.8 million U.S. acres in 2011 and 76.1 million acres last year. Wheat was harvested on 45.7 million acres in 2011 with about 10 million more planted in the U.S. (some of which was used as a forage or a cover crop; some of which was destroyed by bad weather events). Source: USDA-ERS Yearbook

Corn is being produced much more efficiently since 1980. From 1980 to 2011, corn
  • Per Acre: yields increased 64%
  • Per Bushel: soil erosion decreased 67%, decreased irrigation water 53% and energy use 44%
  • Total impact: decreased soil erosion 31%, increased total land us 21%, increased irrigation water 27%, and energy use 14%
  • source Field to Market Report: http://www.fieldtomarket.org/report/
Some of the numbers used in the food vs. fuel debate are from older sources. Because farmers have increased yields by 64% and decreased per bushel energy use by 44% since 1980, using old numbers can result in wrong conclusions.

None of these numbers refer to sweet corn which is grown on other acres. Sweet corn is grown on about 600 to 800 thousand acres overall. (USDA Census 1987-2007).

While there is concern about using corn for ethanol production, we currently produce enough corn to meet the demands for fuel, feed for livestock and food for people. In addition, we are able to export more corn to other countries than we eat directly.

When looking at what corn costs, when corn reached an all-time high of $8.03/bushel last year, a 24-oz box of corn flakes cost $3.28 at Walmart. If the entire 24 ounces was corn (not sugar, or other ingredients), then the value of corn in that box was $0.22. If we assume a premium, then that value may have been $0.33 per box. The current market price of corn is $4.35 per bushel, which is about $0.12 of corn per box. But the price of the 24-oz box of corn flakes was still $3.28. While corn prices dropped 46%, the price of corn flakes was unchanged. Higher corn prices get blamed for higher overall food prices, but in this real example, the actual dollar value received by the farmer has relatively low impact on the overall cost of food at the grocery store.

For more numbers on corn consider these sites:
Agronne National Lab Report on Ethanolhttp://www.transportation.anl.gov/pdfs/TA/375.pdf
USDA ERS Grains Yearbook Tables


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